Category: Advocacy

Bolton Meets with Secretary of Labor Tom Perez

Bob Bolton, a member of the MCAA Board of Directors and the MCAA Government Affairs Committee, discussed the recent Treasury Department decision to veto the Teamster Central States remedial benefit suspension proposal with Labor Secretary Tom Perez at a recent Rhode Island Chamber of Commerce event in Providence, RI.

Bolton raised the issue of the potential impact of Treasury Department Special Master Ken Feinberg’s reevaluation and denial of the Teamster Central States remedial plan and its potentially devastating impact on the Pension Benefit Guaranty Corporation (PBGC) multiemployer plan insurance fund. He also noted the devastating PBGC premium increases on all well-funded plans in other industries.

In response, Mr. Perez said that the Administration was carefully analyzing the impact on PBGC premiums and the collateral effects on healthy plans in other industries on an ongoing basis. Bolton attended the Rhode Island event just after lobbying the pension reform issue at the MCAA/Quality Construction Alliance National Issues Conference in Washington, DC.

National Issues Conference Attendees Focused on Critical Industry Issues

Close to 200 contractors and association executives attended the 2016 MCAA/QCA National Issues Conference in Washington, DC, last week to get the latest information on critical industry issues and to share their concerns about those issues with their Senate and House members.

During the three-day conference, over 120 visits took place between MCAA and Quality Construction Alliance (QCA) members and Congressional Representatives and Senators.

A long list of House and Senate representatives made this conference a success, briefing attendees on a wide range of issues affecting MCAA and allied association members’ business concerns.

Issues included:

  • A new bill to stem payroll fraud stemming from misclassifying employees as independent contractors from lead Representative Tom MacArthur (R-NJ);
  • Federal Infrastructure funding measures by Senator John Barrasso (R-WY), Congressman Lou Barletta (R-PA) and Representative John Delaney (D-MD);
  • Congressman Peter Welch (D-VT) addressed energy policy legislation; and
  • Representative David McKinley (R-WV) described the formation of the new bipartisan Congressional Building Trades Caucus.

The Conference also focused on recent critical regulatory developments. This part of the program consisted of three expert panel discussions which detailed developments on the Administration’s pending regulations to:

  • Require registered apprenticeship programs to file annual written affirmative action plans showing apprentice enrollment of women and minorities and the relation of that utilization rate to the availability of women and minorities in the apprenticeship recruitment area;
  • Executive Order 13673, requiring prime contractors and subcontractors competing for federal contracts and subcontracts of $500,000 or more to file legal compliance certifications for pre-award responsibility reviews; and
  • Executive Order 13706, requiring federal prime contractors and subcontractors to provide one hour of paid sick/family leave for every 30 hours their employees work directly on or related to (20% or more) a covered federal contract or subcontract.

All of the attendees enjoyed remarks from CNN news commentator and analyst Gloria Borger as she discussed the 2016 political scene.

mcgarveyThe program concluded with a strong address by Sean McGarvey, president of the North America Building Trades Unions, on:

  • The broad scope of NABTU (formerly BCTD) initiatives with owner/labor/management tripartite market councils;
  • Workforce development pre-apprentices outreach efforts to incorporate under-served potential workers into the construction industry;
  • Initiatives for economically targeted investments by pension plans to earn high return and support union construction; and
  • Ways to focus project owner/financing groups on collaborative efforts with the union-sector delivery system.

President McGarvey made very positive remarks on industry pension reform phase 2 efforts.

Pension and health plan benefits experts Cary Franklin and Aruna Vohra from Horizon Actuarial Services and Malcolm Slee and Josh Shapiro from Groom Law Group discussed a broad scope of tough challenges for attendees’ health and pension plans from the perspectives of either contributing employers or plan trustees.

The 2017 MCAA/QCA National Issues Conference will take place May 2-4, 2017, at the Marriott Georgetown Hotel in Washington, DC. So save the date!

Pension Reform Phase 2 Took Center Stage at the Newseum

Former Congressman George Miller took charge of the pension reform segment of the program at the 2016 National Issues Conference. He led an expert discussion of the alternate/composite plan proposal that MCAA and the Quality Construction Alliance are hoping to see adopted by Congress this year.

Mr. Miller and Randy DeFrehn of the National Coordinating Committee for Multiemployer Plans (NCCMP), along with Preston Rutledge, Senior Tax and Benefits Counsel for the Senate Committee on Finance, explained the many cross-currents on a variety of pension reform issues confronting Congress this year, including the need to shore up funding for the Pension Benefit Guaranty Corporation and recent developments affecting other union pension and health plans.

Former Congressman Miller summarized all the pension reform issues, based on his many years as the leading labor Democrat in the House, and encouraged the group to engage positively with Congress on this most essential reform for the industry.

MCAA participants reviewed a letter from the UA and MCAA leadership recently submitted to the Senate Finance Committee supporting composite plan reforms.
Download joint UA-MCAA Letter on Pension Reform

Treasury Department Rejects Teamsters’ Remedial Pension Plan

The Treasury Department’s Special Master, Kenneth Feinberg, rejected the remedial application of the Teamsters Central States’ pension plan to cut benefits in order to save the plan from even greater cuts due under the Pension Benefit Guaranty Corporation insolvency status.

Feinberg said the remedial plan actuarial and participant age assumptions were unreasonable, the benefits cuts were not distributed equitably across all participant categories and the explanation of the remedial plan did not meet the “understandability” criteria of the Pension Reform Act.

Reacting to the Treasury Department’s action, the Partnership for Retirement Security (sponsored by MCAA, the National Coordinating Committee for Multiemployer Plans and other signatory groups), said,

“While today’s decision by the U.S. Department of the Treasury to deny Central States Pension Fund’s rescue plan will temporarily spare many from cuts to their hard-earned benefits in the short-term, it also sentences participants to an insecure retirement where massive benefits cuts are inevitable. By their decision today, Treasury is gambling that Congress, which has flatly refused to assist these plans or the PBGC in the past, will now appropriate more than $100 billion required to rescue, not just Central States, but the entire system. It is a big bet. Unfortunately, rather than those who made the decision, it will be the pensioners who pay the price if it is lost.”

The NCCMP alternate plan design proposal – composite plans – which is designed to avoid the Central States type problem, will be at the top of the agenda for the Quality Construction Alliance National Issues Conference, which takes place in Washington, D.C. May 10-12.

MCAA President Tom Stone Addressed UA’s Tripartite Conference, Honored General President Bill Hite

During the United Association’s Eighth Annual Tripartite Conference in Chicago April 26, MCAA President Tom Stone highlighted the best-value proposition MCAA employers and UA labor present for construction owners nationwide.

President Stone’s remarks also included a video of the MCAA Lifetime Achievement Award presentation to General President Hite at the association’s 2016 convention.

U.S. Labor Secretary Tom Perez addressed the group and lauded the labor/management collaboration between MCAA and the UA nationally and locally as a model for widespread deployment in other U.S. industries. Secretary Perez commended the UA for its leadership in helping address and remedy the water contamination crisis in Flint, MI. He expressed strong support for prevailing wage law enforcement efforts and the Department of Labor’s efforts to crack down on widespread wage fraud nationally perpetrated by worker misclassification.

North America Building Trades Union (NABTU) President Sean McGarvey also addressed the conference, highlighting a new NABTU initiative to promote the deployment of pension plan investment policies that would yield high returns in projects using union labor.

MCAA Members Meet with House Ways and Means Committee Chair on Pension Reform

MCAA members met with House Ways and Means Committee Chairman Kevin Brady (R-TX) on pension reform on April 21, pressing for positive action by Congress that would allow plan trustees the option to consider adopting new pension plan designs, if appropriate for their area.

Meeting with Chairman Brady in Washington, DC, were MCAA members Barry Moore, President of Brandt Engineering (Dallas, TX), Jim Letsos, President/CEO of Letsos Company (Houston, TX), and MCA of Texas Executive Director Glenn Rex. They outlined the ways that the Solutions Not Bailouts legislative proposal would allow plan trustees to consider new options for multiemployer defined benefit plans that would reinvigorate the plan and workforce demographics, and improve long-term sustainability and MCAA member competitiveness and market share.

The new plan design proposal was pulled back from the Kline-Miller Multiemployer Plan Reform Act (MPRA) that passed in December 2014 with a promise for positive action in the next year, which fell short due to leadership changes in the House.

With the House leadership issues settled, MCAA and the National Coordinating Committee for Multiemployer Plans (NCCMP) are pressing again for Congressional action before this year’s session ends. And, pension reform will lead the agenda for the MCAA/Quality Construction Alliance National Issues Conference (May 10-12, Washington, DC). Former California Representative George Miller will moderate the pension reform panel discussion.

MCAA Leads Industry Group Seeking Industry Exemption from Paid Sick Leave Executive Order

An MCAA-led industry group provided analyses to the Office of Management and Budget (OMB), Office of Information and Regulatory Analysis (OIRA), and the Department of Labor’s (DoL) Wage and Hour Division as part of its efforts to obtain an industry exemption from President Obama’s Executive Order 13706—requiring paid sick leave accrual for those working on federal contracts—for employees covered by a collective bargaining agreement who are working on direct federal construction and federal facility HVAC service contracts.

MCAA representatives Adam Snavely of The Poole & Kent Co. (Baltimore, MD), Chip Mitchell of the Kirlin Group (Rockville, MD), Steve Weissenberger of MCA-Maryland, Bob Battista representing the MCA-MD and MCA Detroit and MCAA General Counsel John McNerney met with OMB/OIRA/DoL officials on February 11 to discuss the rationale for providing a collective bargaining exemption in the upcoming EO 13706 regulatory proposal.

MCAA’s position, also supported by the Construction Employers of America, laid out an analysis of ways to implement EO 13706 that are consistent with federal procurement, labor, and regulatory implementation policies. MCAA’s effort is aimed at gaining a favorable regulatory approach before a proposed regulation is published, rather than waiting for a proposed rule to be issued with less favorable options.

EO 13706 proposed regulations may be issued within the next month. MCAA’s initial letter to OMB and an outline of MCAA’s February 11 oral presentation are available by clicking on the links below.

Written Comments

Oral Presentation Outline

New Comprehensive Inventory of Construction Industry Multiemployer Pension Plans Released

MCAA, in conjunction with Horizon Actuarial Services, LLC, has released the Fourth Edition (February 2016) of its comprehensive inventory and analysis of construction industry multiemployer defined benefit pension plans for all 790 construction industry plans covering the 2004 through the 2013 plan years.

In releasing the report, MCAA President Steve Dawson said, “MCAA is extremely proud to partner with one of the premier actuarial firms in the industry, Horizon Actuarial Services, LLC to bring this ground-breaking work forward and maintain it on a periodic basis for the benefit of the industry… Before MCAA and Horizon began this collaboration, this type of comprehensive in-depth analysis of the Form 5500 database was not available….”

The report examines trends in plan demographics, cash flows, investment returns, funding status, and other plan costs and expenses over the plan years, which represent the most current Form 5500 data completely available for compilation and analysis.

The Inventory shows continuing steep challenges to the sustainability of the multiemployer system with long-term adverse demographic challenges remaining intractable, with fewer than seven active contributing employees for every 10 participants in the median plan data.

The Inventory data document the continuing need for Congressional action to enact reforms—such as the Solutions Not Bailouts legislative reform proposal. The proposal allows trustees to choose alternate plan designs—composite plans—that will build greater resilience and sustainability into the future of the valuable multiemployer defined benefit plan system for the industry workforce, sponsoring employers, and participants and beneficiaries of the plans. The Solutions Not Bailouts alternate plan design proposal option is strongly backed by MCAA and the National Coordinating Committee for Multiemployer Plans’ (NCCMP) legislative coalition.

Read the full news release about the Inventory at the link below. The Inventory is available as a free download to MCAA and MSCA members.

Download the Inventory

Read the News Release

Labor Department Releases New Guidance Affecting Misclassification of Employees

Labor Department Wage and Hour Administrator Dr. David Weil released a new Administrator’s Interpretation 2016-1: Joint Employer under the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA).

This interpretive guidance, with less significance than a regulation, has primary significance to the construction industry as a way to stem rampant misclassification of employees as independent contractors, an unfair competitive advantage that some non-signatory firms have over signatory employers. This guidance also affects only wage-and-hour compliance and is separate from the controversy surrounding the new National Labor Relations Board’s (NLRB) joint employer ruling that is roiling unorganized firms in the context of union organizing efforts. In either case, the NLRB or Labor Department’s single employer policies have very limited application to union-signatory Section 8(f) contractors or prime contractors in the ordinary course of construction industry construction prime contract and subcontract commercial contract performance. Following is an example from the DoL Guidance derived from the air conditioning service industry:

A mechanic is employed by Airy AC & Heating Company. The Company has a short-term contract to test and, if necessary, replace the HVAC systems at Condor Condos. The Company hired and pays the mechanic and directs the work, including setting the mechanic’s hours and timeline for completion of the project. For the duration of the project, the mechanic works at the Condos and checks in with the property manager there every morning, but the Company supervises his work. The Company provides the mechanic’s benefits, including workers’ compensation insurance. The Company also provides the mechanic with all the tools and materials needed to complete the project. The mechanic brings this equipment to the project site. These facts are not indicative of joint employment of the mechanic by the Condos.

Click on the link below for the entire DoL release. Within that material is an example of a DoL enforcement action against a drywall firm for misclassification in that industry. Some comments indicate that construction prime and subcontract commercial contracts can be revised to address or defend against adverse application of these rules in the commercial contracting business. An initial analysis of those comments shows that regulators (see example above) are focused on the workforce realities of worker conduct and supervision, and boilerplate contract or subcontract terms will not be an effective defense against an adverse determination finding on a factual application of the single employer rules in either a union election process or a wage-and-hour misclassification context.

DoL Release

MCAA Takes Action on Paid Sick Leave Executive Order

MCAA filed comments on the Administration’s Paid Sick Leave Executive Order (EO) 13706, which also is under an expedited path for final publication for mid-2016 and implementation in 2017. The EO would require direct federal prime contractors and subcontractors to provide paid sick leave (one hour of paid leave for every 30 hours worked) on a covered federal contract or subcontract of $2,000 or more. The minimum annual amount of leave is 56 hours, which can be carried over on an annual basis and reinstated after breaks in service of less than a year.

MCAA filed comments on its own behalf and on behalf of the Construction Employers of America after the draft proposed regulations were sent to the Office of Management and Budget and Office of Information and Regulatory Analysis (OIRA) for pre-clearance before the expected early release of a regulatory proposal in February 2016.

MCAA’s comments raised a number of questions about the statutory authority for the EO and the specific implementation issues under the federal Acquisition Regulations. MCAA also requested an in-person discussion on the comments at OIRA in the review process. OIRA is expected to grant that request and provide a hearing with MCAA and coalition representatives in late January. MCAA is assembling a team of select federal contractors, prime and subcontractors that perform covered federal new construction and service contracts to discuss the EO issues with OIRA in late January.

Read the Comments

MCAA Seeks Delay on Affirmative Action and Non-Discrimination Regs

As the last year of the Obama Administration begins, regulatory activity is intensifying to get long-delayed initiatives off the regulatory docket and into regulations before the end of the legislative year to avoid Congressional suspension and review of midnight regulations. One issue concerns new and much more comprehensive affirmative action and non-discrimination regulations proposed for registered apprenticeship programs.

MCAA filed comments in late December seeking an extension of the comment period, slated to close January 5, until March 6, 2016 or later. The delay would allow more comprehensive and constructive analyses of sweeping new rules that set goals for disabled apprenticeship applicants and written affirmative action plans, comprised of specific labor market workforce availability analyses for minority and female candidates, and utilization analyses and specific goals and timetables for affirmative action goal compliance.

The proposed regulations also add age and gender identity/sexual preference as categories for non-discrimination safeguards in program administration. Penalties for non-compliance range up to program de-registration.

MCAA is working with the UA and the International Training Fund and an outside consultant on program compliance guidance. The Department of Labor granted the extension, with the comment period now due to expire on January 20, 2016.